As Ryanair chief executive Mr Michael O'Leary prepared to announce Ryanair's latest deal with Boeing, he was keen to let it be known that it had got a bargain.

Minutes before the press conference, he was explaining that Boeing's senior executives would be shortly joining him so he had to be careful of talking about the discounts it had negotiated. Both sides had agreed to use the term "economic improvements" on the price Ryanair had previously paid when it placed a similar order in 1999, he said. To give a flavour of the airline's bargaining power though he leaned in and whispered: "We are their only customer."

Ryanair's order is the largest placed by any airline outside of the US for its next-generation aircraft. Yesterday it said it would take 70 aircraft and had options to take another 70 between 2008 and 2012.

Mr Alan Mulally, the president and chief executive officer of Boeing commercial planes, said the firm order for 70 aircraft was valued at $4.6 billion (€3.5 billion) at list prices. If all of the options are exercised over another 70 aircraft the order's total value rises to $9.2 billion (€7 billion).

Most analysts believe Ryanair will get these aircraft at 50 per cent of the list price.

The Irish-based airline is half-way through receiving the 155 new Boeing 737-800 planes it last ordered and already has one of the newest fleets amongst the European carriers. Over the next seven years its fleet could expand to more than 400.

The new aircraft will give Ryanair the capacity to double its passenger numbers to 70 million by 2012. It will also be carrying those passengers at half of the current cost, according to Mr O'Leary.

The new 737-800s use less fuel and are more efficient overall for the airline to operate. In addition, Ryanair has ordered new technology for the batch of 737-800s in its current Boeing order. The Blended Winglet technology, which will be fitted immediately on its existing aircraft, will enhance the aircraft's performance, reduce its fuel consumption and bring environmental improvements.

From January 2006 all new planes delivered will have this technology installed.

The airline intends to buy between 60 and 80 per cent of the new aircraft ordered outright and will take operating leases on the remainder. Mr O'Leary pointed out that Ryanair had a strong balance sheet, with cash of around €1.5 billion, but gave no further details about funding the entire order.

Some analysts thought it was significant that Ryanair's chairman, Mr David Bonderman, was in London to join Mr O'Leary in making the announcement. He is the founder and chairman of the Texas Pacific venture capital group and some wondered whether it would contribute to the financing.

Mr Bonderman, who has played a key role in the airline's negotiations with Boeing in the past, said its partnership with the aircraft manufacturer had been central to its successful growth as the lowest-fare and lowest-cost airline in Europe.

"With this new order and pricing in place, Ryanair expects that unit operating costs (excluding fuel) will continue to fall each year for the next five years. This will enable Ryanair to offer even lower fares," he said.

The Ryanair order is a significant coup for Boeing, which has been losing out to its main rival, Airbus, in Europe in recent years. Ryanair's rival low-cost airline, easyjet placed orders to take 120 of Airbus's A319 aircraft in 2002 with options over another 120.

Boeing's Mr Mulally said the next-generation 737s were the newest and most efficient in their class and said that the timing of Ryanair's order with the firm was significant.

"It secures Ryanair's ability to lead growth in the low-cost segment and demonstrates the airline's market insight into the recovery taking place in our industry," he said.

It can only mean lower fares, says Mr O'Leary.

This time last year Ryanair shocked the markets by issuing a profit warning that knocked more than a third off the airline's stock market value. It has since recovered that ground, on the back of strong passenger numbers and enhanced profitability but Mr O'Leary remains cautious about the outlook for the industry.

Most analysts were taking comfort in the fact that this announcement will have no impact on the airline's business for the next three years.

Looking beyond they will be hoping that Ryanair can cope with this pace of expansion.